Dharma Polimetal

Bloomberg: DRMA.IJ | Reuters: DRMA.JK

Automotive Sector
7 January 2022 JCI Index: 6,653

BUY (Initiation) Let’s Get the Machine Running!

Target Price (IDR)
Potential Upside (%)
Price Comparison
Cons. Target Price (IDR)
SSI vs. Cons. (%)
Stock Information
Last Price (IDR)
Shares Issued (Mn)
Market Cap. (IDR Bn)
52-Weeks High/Low (IDR)
3M Avg. Daily Value (IDR Bn)
Free Float (%)
Shareholder Structure:
PT Dharma Inti Anugerah (%)
PT Triputra Investindo Arya (%)
Public
Others
Stock Performance
(%) YTD
Absolute 39.2
JCI Return 1.6
Relative 37.6
Stock Price & Volumes, 12M
830 DRMA, an automotive component manufacturing company under the Triputra
25 Group, had completed its IPO on December 20, 2021, raising IDR 352.9 billion in
the process. The majority of the funds will be used to support the company's
business expansion, including the construction of a new factory and procurement
n.a
of production machinery. DRMA recorded satisfactory performance in 1H21,
n.a
booking IDR 1.3 trillion in revenue (+46.3% yoy) and IDR 99.0 billion in net profit
(1H20: IDR -32.7 billion net loss). DRMA’s financial condition is relatively healthy,
as reflected by its 1H21 net gearing ratio (1.0x) and interest coverage ratio (4.9x).
665 We initiated our coverage on DRMA with BUY recommendation and TP of IDR 830
4,706 (13.2x FY22F PE, same as the industry average).
3,129
Raising IDR 352.9 billion through IPO. Established in 1989, DRMA is a subsidiary of
15 the Triputra Group that focuses on automotive component manufacturing. The
company raised IDR 352.9 billion through its IPO, which was completed on
47.6 December 20, 2021. The majority of the funds (around 70%) will be used to support
13.5 the company’s business expansion, including the construction of a new factory and
15
23.9 the procurement of stamping machines, welding robots, and other production
equipment. DRMA will start supplying car components for Hyundai in January 2022,
which we believe will further improve the company's performance going forward. In
addition, DRMA is currently developing EV (electric vehicle)-based automotive
1M 3M 12M components, which will add more value to the company.
n.a n.a n.a
1.3 4.2 8.7
Revenue growth of +46.3% yoy in 1H21. In 1H21, DRMA recorded revenue growth
n.a n.a n.a
of +46.3% yoy to IDR 1.3 trillion. The motorcycle (2W) segment was the largest
contributor to DRMA's revenue (68.2%), while the four-wheel segment (4W) and
other segments accounted for 21.0% and 10.8% of the company's revenue,
respectively. In addition, DRMA also recorded significant gross profit growth in 1H21
(+180.1% to IDR 200.5 billion), with a GPM of 15.3% (1H20: 8.0%). Regarding its
bottom line, DRMA recorded a net profit of IDR 99.0 billion in 1H21, much better
than 1H20 (IDR -32.7 billion net loss).

Attractive valuation, BUY with TP of IDR 830. DRMA has a sound financial
condition, as reflected by its 1H21 net gearing ratio (1.0x) and interest coverage
ratio (4.9x). In addition, DRMA’s current valuation (10x FY22F PE) is quite attractive,
considering that it is lower than the automotive and components industry average
(13.2x PE).In FY22F, we project DRMA's revenue and net profit to grow +20.0% yoy
and +32.0% yoy to IDR 3.3 trillion and IDR 297 billion, respectively. We initiated our
coverage on DRMA with BUY recommendation and TP of IDR 830 (13.2x FY22F PE,
same as the industry average).

Company Background Forecasts and Valuations (at IDR 665/share)

Established in 1989, PT Dharma Polimetal is a leading Y/E Dec 19A 20A 21F 22F 23F
manufacturer of automotive components (for
Revenue (IDRBn) 2,729 1,875 2,780 3,336 3,900
motorcycles and cars), The company also produces
three-wheeled vehicles (PowerAce) and foldable
EBITDA (IDR Bn) 347 157 420 538 632
bicycles (Polimetal). EV/EBITDA (x) 8.4 19.2 7.8 6.0 4.7
Net Profit (IDR Bn) 171 19 225 297 350
EPS (IDR) 43 5 48 63 74
P/E Ratio (x) 15.6 140.7 13.9 10.5 8.9
BVPS (IDR) 126 127 231 304 391
P/BV Ratio (x) 5.3 5.2 2.9 2.2 1.7
Pebe Peresia ROAE (%) 33.8 3.7 20.7 20.8 19.0
+62 21 2854 8339 ROAA (%) 11.3 1.2 9.2 10.4 10.4
Pebe.peresia@samuel.co.id Net Gearing (x) 0.8 1.0 0.3 0.2 0.0

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 Dharma Polimetal
Bloomberg: DRMA.IJ | Reuters: DRMA.JK
Automotive Sector
7 January 2022 JCI Index: 6,653

Company Background
PT Dharma Polimetal (DRMA) is a subsidiary of Triputra Group that engaged in the
manufacturing industry. Established in 1989, DRMA produces components for both
motorcycles and cars. DRMA is a supplier for a number of well-known automotive
manufacturers in Indonesia, including PT Astra Honda Motor, PT Kawasaki Motor Indonesia,
PT Astra Daihatsu Motor, PT Toyota Motor Manufacturing Indonesia, PT Honda Prospect
Motor, PT Suzuki Indomobil Motor, PT Hyundai Motor Manufacturing Indonesia, and PT
Nissan Motor Indonesia.

Figure 1. Triputra Group’s Business Segments

Source: Company

DRMA has 8 (eight) subsidiaries that run an integrated automotive component manufacturing
operation; Dharma Poliplast, Dharma Electrindo Manufacturing, Dharma Controlcable
Indonesia, Dharma Precision Tools, Dharma Precision Parts, Dharma Kyungshin Indonesia,
Sankei Dharma Indonesia, and Saikono Otoparts Indonesia. Each subsidiary has its own role in
the operation (as shown in Table 1).

Table 1. DRMA’s Subsidiaries

Subsidiaries
Dharma Poliplast
Dharma Electrindo Manufacturing
Dharma Controlcable Indonesia
Dharma Precision Tools
Dharma Precision Parts
Dharma Kyungshin Indonesia
Sankei Dharma Indonesia
Saikono Otoparts Indonesia
Source: Company
Main Products
Manufacturing of plastic injection & components for automotive, electronic, and
home appliances industry
Manufacturing of wiring harness, electronic components and parking sensor
Manufacturing of cable control component for both motorcycle and automobile
Major suppliers of special cutting tools, such as Special Drills, Diamond & Carbide
Cutting Tools, Special Purpose Machine, etc
Manufacturing of precision machining metal components used in a variety of
products
Manufacturing harness system for Hyundai Motors. JV company between Kyungshin
(Korea) and Dharma Polimetal
Manufacturing automotive exhaust system. JV company between Sankei Giken
(Japan) and Dharma Polimetal
Trading company

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 Dharma Polimetal
Bloomberg: DRMA.IJ | Reuters: DRMA.JK
Automotive Sector
7 January 2022 JCI Index: 6,653

sFigure 2. Structure of Dharma Group

Source: Company

Apart from being a supplier of automotive components, DRMA also produces three-wheeled
vehicles (under the PowerAce brand) and foldable bicycles (under the Polimetal brand) while
also developing EV (electric vehicle) components. With the support of skilled and competent
workers and more than 400 robots in its production line, DRMA can supply products with
global standards to its customers.

Figure 3. Products – 3W and Bicycle

Source: Company

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 Dharma Polimetal
Bloomberg: DRMA.IJ | Reuters: DRMA.JK
Automotive Sector
7 January 2022 JCI Index: 6,653

DRMA’s business segments consist of two-wheel (2W), four-wheel (4W), and others. In 1H21,
the two-wheel (2W) segment contributed 68.2% (IDR 891 billion) of DRMA’s total revenue,
with a gross profit of IDR 150.3 billion and a GPM of 16.9%. PT Astra Honda Motor (AHM) was
the largest customer of DRMA’s 2W segment, contributing 89% of the segment’s revenue.
Meanwhile, the four-wheel (4W) segment contributed 21.0% of DRMA’s total revenue (IDR
275 billion) in 1H21, with a gross profit of IDR 32 billion (GPM: 11.7%), while the others
segment contributed 10.8% of the company's total revenue (IDR 142 billion) with a gross
profit of IDR 18 billion (GPM: 12.8%).

Figure 4. Revenue Mix 1H21 Figure 5. DRMA’s Business Segments (In IDR billion)

Source: Company, SSI Research Source: Company, SSI Research

Figure 6. Revenue Mix 1H21 Figure 7. Gross Profit & GPM

Source: Company, SSI Research Source: Company, SSI Research

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 Dharma Polimetal
Bloomberg: DRMA.IJ | Reuters: DRMA.JK
Automotive Sector
7 January 2022 JCI Index: 6,653

Key Financial Figures

Profit and Loss Cash Flow
Y/E Dec (IDR Bn) 19A 20A 21F 22F 23F Y/E Dec (IDR Bn) 19A 20A 21F 22F 23F
Revenue 2,729 1,875 2,780 3,336 3,900 Net Profit 171 19 225 297 350
Cost of Revenue (2,278) (1,654) (2,335) (2,786) (3,256) D&A 100 109 125 161 192
Gross profit 452 221 445 550 643 Changes in Working Capital (16) 81 (87) (43) (48)
Selling Expense (37) (31) (33) (40) (47) Operating Cash Flow 236 228 179 391 467
G&A Expense (167) (141) (117) (133) (156) Capital Expenditure (267) (164) (323) (352) (240)
Operating Profit 247 49 295 377 441 Others 53 (156) (17) (29) (30)
EBITDA 347 157 420 538 632 Investing Cash Flow (214) (320) (341) (382) (270)
Other Income (Expense) 33 19 49 61 71 Net Borrowing (29) 104 92 66 72
Finance Expense (49) (54) (50) (50) (55) Dividend Paid 0 0 0 45 59
Pre-tax profit 233 16 296 390 459 Others (23) (5) 353 45 59
Income Tax (59) (8) (68) (90) (106) Financing Cash Flow (52) 99 445 111 132
Profit For Period 174 8 228 300 354 Net Changes (30) 7 284 120 328
Minority Interest (4) 11 (3) (3) (4) Cash at beginning 91 61 69 352 472
Net profit 171 19 225 297 350 Cash at ending 61 69 352 472 800

Balance Sheet Key Ratios

Y/E Dec (IDR Bn) 19A 20A 21F 22F 23F Y/E Dec 19A 20A 21F 22F 23F
Cash & Equivalent 61 69 352 472 800 Gross Profit Margin 16.6% 11.8% 16.0% 16.5% 16.5%
Receivables 333 226 362 398 438 Operating Margin 9.1% 2.6% 10.6% 11.3% 11.3%
Inventory 175 184 267 293 323 EBITDA Margin 12.7% 8.4% 15.1% 16.1% 16.2%
Other Current Asset 91 190 305 332 362 Pre-Tax Margin 8.5% 0.9% 10.6% 11.7% 11.8%
Total Current Asset 660 668 1,286 1,495 1,923 Net Profit Margin 6.3% 1.0% 8.1% 8.9% 9.0%
Net Fixed Asset 756 809 1,007 1,198 1,246 Revenue Growth 11.3% -31.3% 48.3% 20.0% 16.9%
Other Non-Current Asset 99 142 140 158 180 Debt to Equity (x) 0.9 1.1 0.6 0.5 0.4
Total Asset 1,515 1,619 2,432 2,852 3,349 Net Gearing (x) 0.8 1.0 0.3 0.2 0.0
Payables 290 273 405 425 447
ST. Debt and CMLTD 203 251 312 344 378
Other Current Liabilities 452 448 611 633 657 Major Assumptions
Total Current Liability 655 698 923 977 1,035 19A 20A 21F 22F 23F
LT. debt 259 315 346 380 418 BI7DRRR 5 3.8 3.5 3.8 4.3
Other LT Liabilities 716 772 977 1,020 1,069 Inflation (%) 2.7 1.7 1.6 1.8 1.8
Total Liabilities 975 1,087 1,322 1,400 1,488 GDP growth (%) 5 -2.1 3.7 5.0 5.5
Minority Interest 36 23 23 23 23 Car Sales growth (%) -10.5 -48.3 50.3 12.5 11.1
Total Equity 541 532 1,110 1,452 1,861

Tabel 2: Peers Comparison (Automotive & Components Industry)

Ticker Last Price Market Cap (Bn) PE (x) PBV (x) ROE (%)
DRMA 665 3,129 10.5 2.2 20.6
AUTO 1,185 5,712 8.3 0.5 6.7
BRAM 11,900 5,355 23.7 1.9 8.0
INDS 2,090 1,379 8.2 0.5 6.5
GJTL 675 2,349 5.3 0.3 6.7
LPIN 1,080 464 36.4 1.7 4.4
SMSM 1,370 7,891 12.6 3.2 26.6
Average 13.2 1.8 14.5
Source: Bloomberg, SSI Research

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 Dharma Polimetal
Bloomberg: DRMA.IJ | Reuters: DRMA.JK
Automotive Sector
7 January 2022 JCI Index: 6,653

Research Team
Suria Dharma Head of Equity Research, Strategy, Banking, Consumer Staples suria.dharma@samuel.co.id +6221 2854 8148
Lionel Priyadi Macro Equity Strategist lionel.priyadi@samuel.co.id +6221 2854 8854
Fikri Permana Senior Economist fikri.permana@samuel.co.id +6221 2854 8144
Muhamad Alfatih, CSA, CTA, CFTe Senior Technical Analyst m.alfatih@samuel.co.id +6221 2854 8129
William Mamudi, CFTe, CMT Senior Technical Analyst william.mamudi@samuel.co.id +6221 2854 8382
Yosua Zisokhi Cement , Cigarette, Paper, Plantation,Telco Infra, Chemicals yosua.zisokhi@samuel.co.id +6221 2854 8387
Andreas Kristo Saragih Construction, Toll Roads andreas.kristo@samuel.co.id +6221 2864 8303
Dessy Lapagu Aviation, Coal, Metals dessy.lapagu@samuel.co.id +6221 2854 8392
Olivia Laura Anggita Healthcare, Property olivia.laura@samuel.co.id +6221 2854 8346
M. Farras Farhan Media, Poultry, Oil & Gas farras.farhan@samuel.co.id +6221 2854 8346
Calista Muskitta Retail calista.muskitta@samuel.co.id +6221 2854 8331
Pebe Peresia Automotive, Consumer Staples pebe.peresia@samuel.co.id +6221 2854 8339
Adolf Richardo Editor adolf.richardo@samuel.co.id +6221 2864 8397
Ashalia Fitri Yuliana Research Associate ashalia.fitri@samuel.co.id +6221 2854 8389

Equity Institutional Team

Benny Bambang Soebagjo Head of Institutional Equity Sales benny.soebagjo@samuel.co.id +6221 2854 8312
Ronny Ardianto Institutional Equity Sales ronny.ardianto@samuel.co.id +6221 2854 8399
Anthony Yunus Institutional Equity Sales anthony.yunus@samuel.co.id +6221 2854 8314
Fachruly Fiater Sales Trader fachruly.fiater@samuel.co.id +6221 2854 8325
Lucia Irawati Sales Trader lucia.irawati@samuel.co.id +6221 2854 8173
Suryanti Salim Sales Trader suryanti.salim@samuel.co.id +6221 2854 8173
Muhammad Faisal Dealer m.faisal@samuel.co.id +6221 2854 8173

Private Wealth Management

Evelyn Satyono Head of PWM Equity Sales evelyn.satyono@samuel.co.id +6221 2854 8380
Clarice Wijana PWM Equity Sales clarice.wijana@samuel.co.id +6221 2854 8395
Gitta Wahyu Retnani PWM Equity Sales gitta.wahyu@samuel.co.id +6221 2854 8365
Vincentius Darren PWM Equity Sales darren@samuel.co.id +6221 2854 8348
Wahyudi Budiyono Dealer wahyudi.budiyono@samuel.co.id +6221 2854 8152

Fixed Income Sales Team

R. Virine Tresna Sundari Head of Fixed Income virine.sundari@samuel.co.id +6221 2854 8170
Rudianto Nugroho Fixed Income Sales rudianto.nugroho@samuel.co.id +6221 2854 8306
Sany Rizal Keliobas Fixed Income Sales sany.rizal@samuel.co.id +6221 2854 8337
Julio Simangunsong Fixed Income Sales julio.natanael@samuel.co.id +6221 28548384

Equity Retail / Online Team

Joseph Soegandhi Head of OLT joseph.soegandhi@samuel.co.id +6221 2854 8872
Nugroho Nuswantoro Head of Marketing Online Trading nugroho.nuswantoro@samuel.co.id +6221 2854 8372
Damargumilang Head of Equity Retail damargumilang@samuel.colid +6221 2854 8309
Salt World Widjaja Retail Equity Sales salt@samuel.co.id +6221 2854 8163
Widya Meidrianto Equity Retail Widya.meidrianto@samuel.co.id +6221 2854 8317
Michael Alexander Equity Retail michael.alexander@samuel.co.id +6221 2854 8369
s
DISCLAIMER: Analyst Certification: The views expressed in this research accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no
part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The
analyst(s) principally responsible for the preparation of this research has taken reasonable care to achieve and maintain independence and objectivity in making any
recommendations. This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Under no
circumstances is it to be considered as an offer to sell or solicitation to buy any security. Any recommendation contained in this report may not be suitable for all investors.
Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy, completeness and reliability cannot be
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